Rebuilding Britain: putting 'localism' into practice

The new Government is rightly committed to dispersing power and localising
decision-making.

By Ben Lucas

3:21PM BST 19 May 2010

This responds to the growing consensus that Britain, and England in particular, has become too centralised. A good first step was the announcement of a commission to look into devolution and local funding.

But it would be dangerous to underestimate how hard this will be. We have seen good intentions on decentralisation evaporate before, when ministers become reluctant to give up the power they fought so hard to win in opposition. There is an added dimension this time – the deficit. When faced with a crisis, the default position for Whitehall is to centralise. Ministers will be told that giving local areas more discretion over their spending is too risky in the current climate.

All public spending is local

There is another way, which links localism to public service reform and deficit reduction. To paraphrase the late US Democrat Tip O’Neill, all public spending is local. It is at local level that public services are delivered, staffed, managed and, most importantly, consumed. If the new challenge for public services is to get more for less, this cannot be achieved by cutting expenditure within the traditional public service silos. Instead, what is required is for public services to collaborate and integrate at local level, at the same time reducing duplication and cutting costs.

A pilot scheme in 13 large areas of England (Total Place) has shone a spotlight on the extent of service duplication at local level. It achieved this by counting all public spending across a locality and then asking councils, the NHS, the police and other public services to work together to respond to local priorities and identify where savings could

More than half of all government spending in our cities, towns and counties is ring-fenced, which means that while it is spent locally, what it is spent on is prescribed nationally. Since we are talking about vast sums, this matters a lot – total spending in Birmingham is £7.5 billion, in Kent it’s about £9 billion and in Greater Manchester and Warrington it’s £22 billion.

Two thirds of this expenditure is on the giants of social security, health and education. It is only when you make a dent in this that the deficit will be reduced, and only when there is more local control over this expenditure that local democracy will have been restored.

Let cities and counties decide their needs

So here is a simple proposal. Let’s give England’s major cities and counties – which have been left behind by devolution to Scotland, Wales, Northern Ireland and London – control over their destiny in return for committing to bigger savings and public services that reflect local priorities. This would see cities such as Manchester and Birmingham and counties such as Kent negotiating a budget for their area which would remove most of the ring-fencing around services such as welfare, public health, skills and youth offending, in return for localities committing to get better results and spending less. If these three places alone agreed, for example, an annual

5 per cent reduction in their expenditure, this would save nearly £6 billion over three years.

There is an appetite in many of England’s large cities and counties for such a settlement. Counties such as Kent and cities such as Manchester are confident that not only are they better placed than central government to identify savings, but that they can produce better results in tackling problems such as worklessness and youth re-offending.

And give the people accountable leaders

The other essential ingredient in this model of negotiated autonomy is visible and accountable local leadership. If England’s big cities and counties are to take power back from Westminster then local people must be clear about where the buck stops. The Conservative manifesto called for referendums on mayors for our cities. But why would anyone vote for these unless they had new powers? An elected mayor would be a lot more attractive where control over services and budgets had been devolved. A Ken or Boris would be a lightning rod for accountability.

The way to tell whether the new Government is serious about devolution is to follow the money. That means developing a new vision of localism, based on extending citizen power over individual and neighbourhood budgets and combining this with enabling our cities and counties to integrate and commission services across localities. Devolution on this scale will help the government respond to its two greatest imperatives – political reform and deficit reduction.